Western Nunavut businesses crying out for government help, says chamber of commerce
“Businesses here are now in dire need of assistance from the government”
Small- and medium-sized businesses in western Nunavut need more help to deal with the economic blows they’re suffering due to the COVID-19 pandemic, says the Kitikmeot Chamber of Commerce.
There is lots of anger and a growing desperation among the chamber’s 40 members because of the difficulty of accessing the pandemic relief programs announced by the federal government, said the KCC’s executive director, Valter Botelho-Resendes.
“Several of the businesses here are now in dire need of assistance from the government,” he said.
The most affected are construction companies along with restaurants and hotels, he said, with one hotel in Cambridge Bay planning to close.
Some members of the KCC have been obliged to pick and choose what bills they pay or let accumulate. “One has a $20,000 hydro bill,” Valter Botelho-Resendes said.
Others have heavy mortgages. “Now they can’t even make those payments,” he added.
Many have laid off staff.
Botelho-Resendes estimates that about 30 per cent of workers in Cambridge Bay’s small- and medium-sized companies have been laid off, but a KCC member business in Gjoa Haven had to lay off 80 per cent of its staff, he said.
As it stands now, none of the KCC member businesses in Kugluktuk, Cambridge Bay, Gjoa Haven, Kugaaruk and Taloyoak have been able to access the emergency wage subsidy grant that covers 75 per cent of salaries for employees.
The reasons for that are not clear, Botelho-Resendes said.
But that situation that could bring down the Kuugaq Café in Cambridge Bay, which continues to struggle to pay its workers, owner Stuart Rostant told Nunatsiaq News last week.
Rostant said he had applied for the subsidy, but has not received it.
The salary subsidy program is aimed at Canadian employers whose businesses have been affected by COVID-19. It provides a subsidy of 75 per cent of employee wages for up to 24 weeks, retroactive from March 15 to Aug. 29.
Only two of the KCC members, with payrolls between $20,000 and $1.5 million, have been able to access the Canada Emergency Business Account that provides interest-free, partially forgivable loans of up to $40,000 to small businesses and not-for-profits, Botelho-Resendes said.
The two KCC businesses that did tap into that fund could have used more money, like the $100,000 offered later through the Federal Relief Fund.
“Forty thousand dollars for down south is one thing, but it doesn’t go far in the North where the costs are 10 times higher,” Botelho-Resendes said.
But the two businesses that managed to get the $40,000 loan aren’t allowed to apply for the larger amount now, he said, because to be eligible the program says the businesses may not have “previously used the program.”
So the money is far from a bailout, he said. It’s a loan that businesses must qualify for, so they may not have be eligible based on their income or debt levels, such as arrears on other loans.
Some were disqualified on that account, he said.
For businesses to be eligible for the Federal Relief Fund, they need to have had a total employment income for 2019 between $20,000 and $1.5 million.
In spite of that latitude, the application process was still difficult for some because of its detail, Botelho-Resendes said.
Some KCC members had problems with filling out the forms, and saw their request refused.
“So they had to restart the process,” he said.
That’s in contrast with the ease with which many people received the Canadian Emergency Relief Benefit.
That leaves KCC members feeling like the federal government opted to support people, not businesses, particularly in the North.
Some KCC member businesses have received the Government of Nunavut’s $5,000 grants for small businesses, defined as a business that grosses less than $500,000 a year or employs fewer than 10 people.
But for companies near the high end of that scale, $5,000 is a “drop in the bucket,” he said.
There’s also a startup in Cambridge Bay that can’t quality for any financial program because it wasn’t in operation before Oct. 2019, Botelho-Resendes said.
The KCC has a meeting this week with federal officials about the situation in the Kitikmeot region, where its “members have now realized that things are more desperate.”
Their hope is that they can survive the pandemic to offer jobs later in the region, Botelho-Resendes said.